ITAT Ranchi Judgments — April 2025

The Tribunal held that the time limit for issuing a notice under Section 148 is governed by Section 149 of the Act, which specifies the period for issuance, not signing. Since the notice was issued on 01.04.2021, it was beyond the permissible time limit.

The Tribunal held that the addition made by the AO and confirmed by the CIT(A) deserves to be deleted. It was observed that the WhatsApp messages were not supported by any other documentary evidence and the transactions were not found in the assessee's WhatsApp, but in that of her son, who is an independent assessee.

The Tribunal observed that the assessee had not discharged its duty to establish the genuineness of the unsecured loan. Therefore, the matter was restored back to the Assessing Officer for a fresh assessment order after considering all submitted details and examining necessary documents and evidences.

The Tribunal noted that the penalty proceedings were initiated after a significant delay (8-10 years from the relevant AY), which was beyond a reasonable period. Relying on judicial precedents, including decisions from the ITAT Delhi Bench and Delhi High Court, the Tribunal held that the initiation of penalty proceedings was barred by limitation.

The Tribunal held that the penalty proceedings were initiated beyond a reasonable period of limitation, drawing strength from various judicial precedents. The ITAT noted that while the IT Act does not prescribe a specific time limit for such penalty proceedings, they must be initiated within a reasonable period, which is generally considered to be around 4 years.

The Principal Commissioner of Income Tax (PCIT) set aside the assessment order under Section 263, deeming it erroneous and prejudicial to the revenue due to the Assessing Officer's alleged failure to examine records. However, the Tribunal held that the PCIT's action was uncalled for and unnecessary. The Tribunal found that the land purchase and related transactions were conducted on behalf of the company and were duly reflected in the company's books, making the PCIT's order to revise the assessment incorrect.

The Tribunal held that the penalty proceedings were initiated beyond the reasonable period of limitation, citing various High Court and ITAT decisions. The Tribunal found that no specific limitation period was prescribed for such proceedings, but they should be initiated within a reasonable time, which was not the case here.

The Tribunal, following the decision of the Kolkata Bench in Dipak Parui vs JCIT, held that the amendment to Section 40(a)(ia) of the Act, effective from 01/04/2015, restricts disallowance on non-deduction of TDS to 30% of the amount. Therefore, the disallowance for non-deduction of TDS was restricted to 30% of ₹3,00,000/-, amounting to ₹90,000/-. The ground related to diesel expenses was dismissed as not pressed.

The Tribunal held that the PCIT's action under Section 263 was not justified. The assessee had consistently stated that the land was purchased on behalf of the company, and all transactions were reflected in the company's books. The Tribunal found that the PCIT's order was unnecessary as the issue had been clarified by the assessee. Consequently, the PCIT's order was quashed.

The Tribunal found that the CIT(A) had passed an ex-parte order despite the appellant not substantiating their grounds of appeal, due to non-compliance with notices. However, considering that tax laws are welfare legislation and the possibility of circumstances beyond the assessee's control, the Tribunal decided to restore the matter to the CIT(A) for a fresh decision.

The Tribunal held that the PCIT's action under Section 263 was not justified as the assessee had consistently stated that the land purchase was on behalf of the company and all transactions were reflected in the company's books. The Tribunal found the PCIT's order to be uncalled for and unnecessary.

The Tribunal observed that the deposit of ₹14.95 lacs was not related to SBN notes but were cash deposits from sale proceeds and collections from debtors. The assessee's cash-in-hand extract supported adequate funds for the deposit. The Tribunal found that the source of the deposit was explained.

The Tribunal found that the assessee and the donor brother failed to provide concrete evidence, such as bank withdrawal details, to demonstrate how the substantial cash was held for long periods. It was also noted that a significant portion of the claimed source of funds (land sales of Rs. 12,00,000/-) occurred after the last gift date. The Tribunal concluded that no adequate documentation or substantiation was provided beyond a mere certificate from the brother, thus finding no infirmity in the orders of the lower authorities.

The Tribunal condoned the delay in filing the appeals, acknowledging the assessee's genuine cause of ignorance. Consequently, the issues pertaining to Section 12A exemption and Section 80G recognition were restored to the file of the Ld. CIT(E) for fresh re-adjudication, with directions to provide the assessee adequate opportunity of being heard.

The Tribunal held that the mistake in mentioning the assessment year constituted a reasonable cause for the delay. The delay in filing the appeal was condoned. The Tribunal also noted that the Ld. CIT(A) had dismissed the appeal for non-representation.

The Tribunal held that both under-loading charges and demurrage charges were not penal in nature but were incurred as a consequence of contractual agreements with customers and for the purpose of business. Relying on previous judgments of the ITAT and High Courts, the Tribunal found that these expenses were allowable under Section 37 of the Income Tax Act.

The Tribunal held that the cash deposits were made in the firm's bank account, and therefore, the partner cannot be held responsible for explaining these deposits. Any addition should be made in the hands of the firm, not the partner. The addition made in the assessee's name was unjustified.

The Tribunal observed that the penalty notice issued under Section 274 r.w.s. 271(1)(c) was defective as it did not specifically mention the grounds for penalty, failing to strike off inapplicable portions. Following previous judgments, the Tribunal held that such a defective notice vitiates the penalty.

The Tribunal held that the show cause notice for penalty was defective because it did not specify whether the penalty was for concealment of income or for furnishing inaccurate particulars, and the inapplicable portions were not struck off. This defect vitiates the penalty.

The Tribunal considered that under-loading charges were part of a commercial agreement between BCCL and coal buyers, not a penalty for statutory non-compliance. Similarly, demurrage charges were viewed as compensation for using railway facilities beyond the stipulated time, not a penalty. Previous ITAT and High Court decisions supported these findings.

The Tribunal held that the assessee is entitled to claim depreciation at 10% on the 'Road Project' treated as 'building', considering the Hon'ble Supreme Court's decision in PCIT Vs. GVK Jaipur Expressway and the fact that the department has allowed similar claims in subsequent years.

The Tribunal noted that for subsequent Assessment Years (2015-16 onwards), the revenue accepted the claim for depreciation at 10% by treating the 'Project Road' as a building. Relying on a Supreme Court decision, the Tribunal held that the assessee is entitled to depreciation at 10%.

The Tribunal acknowledged the delay in filing the appeal but condoned it in the interest of natural justice, recognizing the issues caused by management changes and lack of awareness. The Tribunal decided to restore the matter to the CIT(A) for fresh adjudication, imposing a cost of ₹10,000/- on the assessee.

The Tribunal condoned the delay of 195 days in filing the appeal. The Tribunal held that the assessee failed to represent its case properly before the lower authorities. Therefore, the issues were restored to the file of the AO for readjudication with adequate opportunities for the assessee.

The Tribunal noted that the assessee did not represent its case before the CIT(A) and Form Nos. 27C were not produced before the AO. In the interest of justice, the matters were restored to the AO for readjudication after giving the assessee an opportunity to be heard and produce necessary documents.

The Tribunal considered the submissions and noted that the assessee did not represent its case before the CIT(A) and Form Nos. 27C were not produced before the AO. In the interest of justice, the appeals were restored to the AO for readjudication.

The Tribunal held that in the interest of justice, the issues in all the appeals should be restored to the file of the AO for readjudication. The assessee should be given an adequate opportunity to present its case and produce the required Form Nos. 27C.